I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

[ahbn41]

I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms and I was not aware of the  form 8606 at the time and did not file a form 8606 for the IRA contribution.  My IRA investment firm, Fidelity, however, generated an IRA contribution on their form 5498 which showed my IRA contribution in 2016. I learned of this the last few days.

Furthermore, I used the turbo tax software in 2016 which did not generate an 8606  for my IRA contribution after the turbo tax software was linked to my Fidelity account.  The turbo tax however generated an 8606 for my wife but it did not generate one for me.

Please help.  what should i do

[Critter-3]

File one now ... it is a stand alone form :  https://www.irs.gov/pub/irs-prior/f8606--2016.pdf

instructions:  https://www.irs.gov/pub/irs-prior/i8606--2016.pdf

[ahbn41]

HI Critter-3, I m filling out the 2016 form 8606. 

1)I entered my ira contribution of $3000 in line 1.

2)I entered $0 in line 2,  

3)Entered $3000 in line 3 (line 1 minus line 2)

4) Instruction said to move number from line 3 to line 14 if there was no distribution or roth conversion in 2016.

5) I entered $3000 in line 14.

Part 1 is completed.

Question:

Is line 13 the FINAL step for me for filling out this 2016 form 8606 as I did not do any distribution nor roth conversion etc to this $3000.?? if it is, I can then mail this out today? Thanks

After the contribution of $3000 in the traditional IRA, the balance went from $3000 to $2600 within days due to my poor choice of stock investment.

Thanks

[Critter-3 · Accepted solution]

Line 14 is the end ... you are done.   Sign page 2 and mail it in. 

[ahbn41]

HI Critter-3, I m filling out the 2016 form 8606. 

1)I entered my ira contribution of $3000 in line 1.

2)I entered $0 in line 2,  

3)Entered $3000 in line 3 (line 1 minus line 2)

4) Instruction said to move number from line 3 to line 14 if there was no distribution or roth conversion in 2016.

5) I entered $3000 in line 14.

Part 1 is completed.

Question:

a) Is line 14 the FINAL step for me for filling out this 2016 form 8606 as I did not do any distribution nor roth

conversion etc to this $3000.??

b) Do i skip line 15 as it does not apply to me?

c) if line 14 is the final step , I can then mail this out today?

Thanks

P/S Apparently prior to my contribution in 2016, I did have a balance of $250 in my traditional IRA account.  However, after the contribution of $3000 in the traditional IRA, the balance in my traditional IRA dropped to $2600 within days due to my poor choice of stock investment. I guess I would not have to worry about paying any negative interest as I was losing money.  And at the end of the year of 2016, i lost more money and the balance in my traditional IRA was about 2,200 

Please ignore my other similar message to this one

[ahbn41]

Thank you.  I will work next on my roller over IRA which is even more of a sad story for me to share it here at a later time. 

[Anonymous]

make sure you sign and date it. mail bu a method where you get proof of delivery.  the ITS may send you a ypenalty notice for $50 for late filing.    all this assumes your qualified to make the $3000  IRA contribution (you need $3,000 in wages or a net schedule C profit of $3,000)

[ahbn41]

One quick question,

Do i check this as a "amended return" on the form 8606 which is asked at section above part 1?

[ahbn41]

Hackitoff, I dont understand. I made a nondeductible IRA contribution and not a deductible contribution. Why should i not be qualified to make a nondeductible contribution?  Thanks

[ahbn41]

Critter-3,

Since I never filed a 2016 form 8606 (because turbotax failed to generate one) and I am preparing a 8606 for the first time, do i have to check the little box asking if this is an "amended return"  ?

Thanks

[macuser_22]

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@ahbn41 wrote:

 Why should i not be qualified to make a nondeductible contribution?  Thanks

---

It would not be qualified if your taxable compensation was not at least the amount of the contribution whether deductible or non-deductible - the limits are the same.

The maximum IRA contributions for 2019 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

[macuser_22]

---

@ahbn41 wrote:

Since I never filed a 2016 form 8606 (because turbotax failed to generate one) and I am preparing a 8606 for the first time, do i have to check the little box asking if this is an "amended return"  ?

---

If not filed then it is an original 8606, not amended.   Be sure you mail a 2016 8606 form.   The 2016 non-deductible  contribution should be on line 1.   Any carry forward non-deductible contributions on line 2, the total of line 1 & 2 on line and line 14 (if there was also no 2016 IRA distribution).

[ahbn41]

i contributed $3000 in 2016. That was all I could afford for someone with a day job.

Am I  qualified to contribute the $3000 to the traditional IRA in 2016?

Thanks

[ahbn41]

Macuser wrote..."Any carry forward non-deductible contributions on line 2,.."

I do not understand this part, about "any carry forward..."

My balance in the traditional IRA in 2015 was about $250 which came from years ago (probably a contribution in 1990s that I do not remember.)  The $250 was sitting there and forgotten all this time .   Do i put the $250 on line 2?

Thanks

[macuser_22]

---

@ahbn41 wrote:

i contributed $3000 in 2016. That was all I could afford for someone with a day job.

Am I  qualified to contribute the $3000 to the traditional IRA in 2016?

---

See my post above:

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355